kengold india ltd Auditors report

KENGOLD (INDIA) LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT TO THE MEMBERS, KENGOLD (INDIA) LIMITED We have audited the attached Balance Sheet of KENGOLD (INDIA) LIMITED as at 30th June, 2001 and the Profit & Loss Account annexed thereto and report that : (1) As required by the Manufacturing And Other Companies (Auditors Report) Order, 1988 issued by the Company Law Board under Section 227 (4A) of the Companies Act, 1956 and on the basis of such records as we considered appropriate and according to the information and explanation given to us during the course of our audit, We enclose a statement in the matter specified in paragraphs 4 & 5 of the said order. (2) Further to our comments in the annexure referred to in paragraph (1) above we state that : a. We have obtained all the information and explanations which to the beat of our knowledge and belief were necessary for the purpose of our audit. b. In our opinion, proper Books of Accounts as required by law have been kept by the Company so far as appears from our examinations of such books. c. The said Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the Books of Accounts. d. In our opinion, the Profit and Loss Accounts and the balance Sheet comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable except Gratuity, Leave. encashment, which are accounted on cash basis. e. Based on written representations made by the Directors of the Company and the information and explanations given to us, none of the Directors of the Company are prima facie as at 30th June, 2001, disqualified from being appointed as directors of the company in terms of clause (g) of sub-section (i) of the Section 274 of the Companies Act 1956. In our opinion and to the best of our information and according to the explanations given to us the said Balance Sheet and the Profit & Loss Account read together with the notes thereon particularly (i) note no. 2 relating to non provision, of interest due for the current period on secured loan taken from IDBI (ii) note no.7 regarding Non-Receipt of balance confirmation in respect of advances recoverable in cash or kind and of amounts due from/to sundry debtors/sundry creditors and. regarding certain daily transactions relating to banking, purchase, sales, expenses etc. being carried out in the name of erstwhile. Growmore Solvent Ltd. gives the information required by the Companies Act 1956 in the manner so required and give a true and fair view. (i) In so far as it relates to the Balance Sheet of the state of Affairs of the Company as at 30th June, 2001 And (ii) So far it relates to Profit & Loss Account, of the loss for the period ended on that date. For Dinesh R. Thakkar & Co. Chartered Accountants Place: Ahmedabad (Dinesh R. Thakkar) Date : 20.11.2001 Proprietor ANNEXURE TO THE AUDITORS REPORT 1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. The management has carried out a physical verification of the major items of its assets and as explained to us that no major discrepancies have been noticed on such verification. In our opinion the frequency of verification is reasonable. 2. None of the fixed assets has been revalued during the year. 3. The stock of traded goods, raw materials, finished goods and construction material have been physically verified during the year by the management except lying with the third parties. In our opinion the frequencies of verification is reasonable. 4. The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. 5. The discrepancies noticed on verification between physical stocks and book records are not material. 6. On the basis of our examinations of stock records, we are of the opinion that the valuations of the stock is fair and proper and in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. 7. The Company has not taken any loans Secured or Unsecured from companies, firms listed in the register maintained u/s 301 of the Companies Act, 1956. However the Company has only taken Unsecured loans from the parties listed in the register maintained u/s 301 of the Companies Act, 1956. The terms & conditions for the same are not prima facie prejudicial to the interest of the Company. 8. The Company has not granted any secured or unsecured loans to the Companies, firms or other parties as listed in the register maintained u/s 301 of the Companies Act, 1956. 9. The parties to whom loans or advance in the nature of loans have been given by the Company are generally repaying the principal amounts and interest as stipulated except for certain cases as informed to us that where such payments are not received, reasonable steps have been taken for recovery for the game. 10. In our opinion and according to the information and explanations given to us there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regards to purchase of raw materials stares and traded goods including other assets and with regards to the sale of goods. 11. In our opinion and according to the information and explanation given to us there are no transaction of purchase of services and sale of goods and materials exceeding Rs.50,000/- made with the Company in which the directors are interested as listed in the register maintained u/s 301 of the Companies Act, 1956. 12. As explained to us, the Company has a system of determining unserviceable or damaged goods and construction material. Adequate provision is being made in the account for loss arising in items so determined. 13. No deposits within the meaning of Section 58-A of the Companies Act, 1956 and rules famed there under have been accepted by the Company. 14. In our opinion, the reasonable records for the sale and disposal of realisable scraps have been maintained by the Company. The Company has no by-products. 15. Though Company has its own internal audit system, in our opinion the same needs to be strengthen so as to commensurate with the size and nature of its business. 16. The maintenance of cost records u/s 209(1-d) of the Companies Act, 1956 is not made applicable to the Company. 17. The Company has generally been regular in depositing provident fund and employee state Insurance dues with the appropriate authorities. 18. According to the information and explanations given to us, there were no amounts outstanding in respect of undisputed Income Tax, Wealth Tax, Sales Tax, Custom Duty and Excise Duty which were due for more than six months from the date they became payable. 19. According to the information and explanations given to us and the records of the Company examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practices. 20. The Company is not a Sick Industrial Company within the meaning of clause (o) of Section 3(1) of Sick Industrial Companies (Special Provisions) Act, 1985. 21. In respect of the Companys trading activities, we have been informed by the management that there were no damaged goods during the period under review. For Dinesh R. Thakkar & Co. Chartered Accountants Place: Ahmedabad (Dinesh R. Thakkar) Date : 20.11.2001 Proprietor